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Managing Conflict of Interests in Professional Accounting Firms: A Research Synthesis

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Abstract

This paper synthesises the research related to managing conflict of interests in professional accounting firms. The main purpose is to provide information about the current state of knowledge on this topic and to highlight the areas requiring further research. The extant research has been reviewed by developing a framework through the integration of Risk Management Framework by ISO 31000:2009 and the International Code of Ethics for Professional Accountants. Specifically, literature has been classified across the establishment of context, assessment, treatment, control and monitoring of conflict of interests. The literature reveals that there is a lack of understanding about how the conflict of interests operates at the level of an individual accounting professional. Addressing this gap will help to develop behavioural interventions for strengthening the professionals’ independence in fact and, thereby, facilitating the management of conflict of interests. The key message this synthesised research provides for professional accounting firms and the regulators is that, for effective management of conflict of interests, behavioural interventions should be informed by the professionals’ unconscious (automatic) as well as their conscious (controlled) cognitive processes. This study is the first one to view the conflict of interests in a professional accounting environment through the lens of behavioural risk management. Moreover, the framework adopted for reviewing the extant literature provides a comprehensive view of the issues surrounding the ineffective management of the conflict of interests.

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Abbreviations

AICPA:

American Institute of Certified Public Accountants

NASBA:

National Association of State Boards of Accountancy

AAT:

Association of Accounting Technicians

ACCA:

Association of Chartered Certified Accountants

ICAEW:

Institute of Chartered Accountants in England and Wales

CIMA:

Certified Institute of Management Accountants

CIPFA:

Chartered Institute of Public Finance and Accountancy

ICAS:

Institute of Chartered Accountants of Scotland (ICAS)

CAI:

Chartered Accountants Ireland

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Acknowledgements

My appreciation goes to Prof. Magdy Abdel-Kader and Dr Mirna Jabbour for their useful comments on the work this paper derives from.

Funding

This paper is part of the empirical study conducted for my PhD. I received a PhD studentship from the Anglia Ruskin University (United Kingdom).

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    Maria Ishaque

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Ishaque, M. Managing Conflict of Interests in Professional Accounting Firms: A Research Synthesis. J Bus Ethics 169, 537–555 (2021). https://doi.org/10.1007/s10551-019-04284-8

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